Opposing Facebook Settlement, CCFC turns down $290,000

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Opposing Facebook Settlement, CCFC turns down $290,000: Rejects award worth 90% of its budget because protections for minors are “hollow" and "meaningless”

Boston—February 13—In an extraordinary decision, Campaign for a Commercial-Free Childhood is refusing a cy pres award of nearly $290,000—more than 90% of CCFC’s 2012-2013 annual budget—and opposing the settlement of a major-class action lawsuit against Facebook. CCFC was one of thirteen nonprofit organizations selected to be cy pres recipients as part of the settlement of the Fraley v. Facebook lawsuit. The Fraley lawsuit involved, among other issues, Facebook’s use of minors’ images and names in advertisements without obtaining parental consent. In an amicus letter filed today with United States Court of Appeals for the Ninth Circuit, CCFC explained its decision to turn down the money and urged the court to reject the settlement because the protections it offers to teenagers are “hollow” and “meaningless.”

“We could do a lot of good with $290,000, but we cannot benefit from a settlement which conflicts with our mission to protect children from harmful marketing,” said CCFC’s director, Dr. Susan Linn.

CCFC and the other cy pres recipients were selected as part of the negotiations between Facebook and the plaintiff’s lawyers. After reading objections to the settlement from Public Citizen and other advocacy organizations, CCFC sought independent counsel to obtain an objective opinion about the settlement’s terms.

“While we always understood the Fraley Settlement Agreement as a compromise, we came to understand that it’s worse than no settlement,” said Dr. Linn. “Unfortunately, its purported privacy protections are largely illusory and it will undermine future efforts to protect minors on Facebook.”

CCFC’s letter details how, in exchange for releasing Facebook from liability for any past harm to minors that was caused by the use of the names or images of teenagers in Facebook’s Sponsored Stories, minors receive little in return. For instance, the protections are structured as opt-in rather than opt-out. In order to opt-in to these protections, minors must either indicate that their parents are not on Facebook or indicate who their parents are on their Facebook profile—a step most teens are unlikely to take. In addition, the settlement authorizes Facebook to continue to violate laws in seven states that provide greater protections for minors.

CCFC has found no previous examples of a nonprofit forgoing a cy pres award in order to oppose a settlement. CCFC hopes that this unprecedented decision will help convince the Court of Appeals for the Ninth Circuit to vacate the district court’s approval of the settlement so that the parties can negotiate a much stronger settlement.

Added Dr. Linn, “It’s now clear that it would be wrong to benefit financially from this ill-advised settlement. We hope our decision will spur further scrutiny and encourage the parties to negotiate an agreement that offers real protections for minors.”